On the estimation of the food poverty line

The paper compares two alternative methods of estimating the food poverty line, the “food basket method” (FB) and the “minimum cost method” (MC), and it shows that under plausible restrictions on households’ preferences and consumption behavior the FB method tends to overestimate the food poverty line with respect to the MC method. The overestimation is also transmitted to the poverty line to an extent that depends on the food expenditure share, the elasticity of the non-food expenditure share with respect to food expenditure and the elasticity of total expenditure with respect to food expenditure.